Running a tech startup is all about the hustle, and James Nguyen, co-founder and CEO of Ottawa cybersecurity company Quantropi, is always thinking about new ways to grow.
Running a tech startup is all about the hustle, and James Nguyen, co-founder and CEO of Ottawa cybersecurity company Quantropi, is always thinking about new ways to grow.
Born and raised in Ottawa, Nguyen started his career in banking after studying economics at Carleton University. Now a self-proclaimed “tech evangelist,” he helped start Quantropi in 2018, becoming an emerging leader in the deeptech space. His work has earned him recognition, including as a former OBJ Forty Under 40 recipient and a nominee for the 2023 Canadian SME National Entrepreneur of the Year. His company, now a NATO-approved supplier, was also a 2022 Deloitte Fast 50 company and 2023 Future in Review FiRe Starter recipient.
In this instalment of Top of Mind in Tech, Nguyen discusses the challenges of raising capital as a Canadian startup and why Quantropi decided to patent its technology.
The transcript has been edited for length and clarity.
Raising capital in a challenging funding environment
“Capital comes in many different forms, typically private capital and also funding such as from government sources. But navigating through all the great programs and opportunities and the timing of when they’re open or closed can be a lot of work. And if you don’t know, you don’t know. So it’s about keeping up with opportunities.
“The high interest rate environment has made it a lot harder, especially for high-risk type investments like startups. Our company has successfully raised a strong amount of money, mostly from angels, and we haven’t really been able to raise institutional money from VCs because we’re deeptech. We raised a total of US$15 million from angels and other funding sources. If we could’ve raised a US$25-million Series A a couple years ago, that would’ve been great, but the funding environment has not been strong. It’s been quite challenging and that really had a big effect on us. Canada as a whole is a challenging market when it comes to fundraising for tech companies.”
Competing for talent as a startup
“Talent is always a big thing. If you’re a startup, you have limited resources, but you're always competing with big companies before you become very successful or are able to offer great compensation packages. As a startup in an emerging tech market, you’ve really got to be attractive in different ways. That’s what we’ve been trying with branding, with selling the vision.
“We’ve been lucky with talent. If it wasn’t for us being able to attract certain people, I don’t think we’d be around to date. We hired (recruitment firm) Boyden Group and (managing partner) Jim Harmon, and they were basically able to help us find our chief technology officer Michael Redding, who was an American out of Napa, Calif. Invest Ottawa, along with others, helped us with the visa and legal parts of the hiring process. They were very instrumental for us to be able to attract Micheal. He became part of the executive team that helped shift our company to new horizons.
“During the pandemic, people adapted to certain lifestyles and work environments and we had to adapt to stay competitive. But being an innovative tech company, especially in deeptech, it really requires people (in the office) for certain activities. We had to find those right people for the company. It took us a while. But we needed to find them to overcome the challenges we faced, either from a product standpoint or operational. Our team has now grown to 20 strong. We’ve also been recognized a lot for our work. If a company continues to get recognized for their efforts and they still haven’t made it yet, it shows that they have resilience, they believe in this vision and they’ve been able to attract great talent and investors. People start to go, you know what, maybe it’s time to start paying attention.”
Patents and protecting IP
“When we started the company, one of the greatest challenges was how do you protect your greatest asset, which is your IP, your intellectual property, not only within Canada and North America, but globally. (We’ve been working with) general counsel, IP lawyers, and they’ve done a great job in helping us, guiding us, on what we should be keeping as a trade secret versus patented technology.
“We have 10 patents now and 10 more coming up. All this IP is the foundation that empowers our products, that protects our customers. You can’t really protect your IP, anyone can score and use it, without any precautions. For us, we had to decide if we would go the trade secrets routes, keep things hush-hush and go out there really quickly. But for us, we knew it was new technology that would be a great replacement for existing encryption technology. So we said no. We got a patent because we don’t know what the future holds. We took advice from our advisers, our lawyers, our board and filed IP not only in Canada but the U.S., the U.K., Japan, Australia, China. We did this because we knew that we did want to eventually become a top global player. We want to make sure that we protect our technology, our IP, in areas that we think would be strategic.” 
